Optimized fault notification in an overlay mesh network via network knowledge correlation

Failures within a communications network are compensated for by establishing a set of two or more communications paths across the network between a source node and a destination node. At the source node a status of each one of the set of communications paths is maintained, and the data traffic is load-balanced across those ones of the set of communications paths having an operational status. In the event of failure of a physical network resource, a failure notification message is propagated to the source node, which registers a non-operation status of each path traversing the failed resource. Load-balancing of the data traffic continues across the remaining operational paths. Traffic may be prioritized based on service level agreements and quality of service protection guarantees.